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Past Adjustments

Bad debts aft...

Question

Bad debts after preparing trial balance are _______ from debtors.

A

Deducted

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B

Added

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C

No effect

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D

None

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Solution

The correct option is A Deducted
Sometimes, bad debts may occur at the end of accounting period after the accounts are balanced and the trial balance is prepared. In such a case, bad debts should be brought into account by passing the adjusting entry, that is, debiting bad debts account and crediting sundry debtors' account.

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